AMRO: 2020 PH growth to hit 6.4%
Credit to Author: Lisbet K. Esmael| Date: Tue, 25 Feb 2020 17:04:04 +0000
PHILIPPINE economic growth is forecast to pick up to 6.4 percent this year on the back of increased government spending, according to the Asean+3 Macroeconomic Research Office (AMRO).
In a statement on Tuesday, the regional macroeconomic surveillance organization said the country’s economy would rebound despite gross domestic product registering an eight-year-low of 5.9 percent in 2019.
“[T]he economy is expected to continue to recover, led by an acceleration in government expenditure, with growth projected at 6.4 percent in 2020,” it added.
The figure is lower than the 6.5 percent AMRO forecast for 2020 in July, itself a downgrade from the initial 6.6 percent in May.
It is also lower than the 6.1 percent projected by Moody’s Investors Service and the 6.3 percent forecast by Fitch Solutions and Malaysian bank Maybank Kim Eng.
Asean+3 groups the 10 members of the Association of Southeast Asian Nations — Brunei Darussalam, Cambodia, Indonesia, Malaysia, Lao People’s Democratic Republic, Myanmar, the Philippines, Singapore, Thailand and Vietnam — with China, Japan and South Korea.
AMRO also said “[i]nflation, which declined sharply from 5.2 percent in 2018 to 2.5 percent in 2019, is expected to stay within the 2 to 4-percent target range for 2020, as global oil prices and domestic food prices are likely to be contained and demand pressure to remain subdued.”
According to the organization, the Philippines would still have to deal with short-term risks from external sources, noting global policy uncertainties and businesses’ bleak outlook affecting investment spending.
It warned policy restrictions on Philippine offshore gaming operators (POGOs) and a ban on the establishment of new economic zones in Metro Manila “may lead to downward pressures on the property markets.”
AMRO, however, welcomed the government’s move to bolster spending in the aim of making up for state underspending in the first six months of 2019, as well as efforts to not repeat budget delays for 2020.
“The government’s decision on extending the validity of the FY (fiscal year) 2019 appropriation into 2020 was appropriate and pragmatic. The swift passage of [the 2020 national budget] will allow for [the] timely disbursement and better support the economy in 2020,” it said.
WITH REPORTS FROM MAYVELIN U. CARABALLO